So far today, the news cycle has been set to fast-forward, but we have a précis for you: overseas institutions in China, Japan and Europe are atwitter over holding billions of shaky securities in Freddie Mac and Fannie Mae; meanwhile, the FDIC – that’s right, the U.S. government – has been reportedly found out to be predatory lender; and now Treasury Secretary Henry Paulson is “temporarily” roping in Goldman’s Ken Wilson to help him sort out the banking crisis. It already looks like it’s shaping up to be another bumpy week. Now, for a bit on why Wall Street’s meltdown may put even Wilson’s experience as a special-forces officer in the Vietnam War to shame.
Goldman Sachs Group Inc.'s most senior financial-institutions banker, Ken Wilson, is temporarily leaving the firm to advise Treasury Secretary Henry Paulson on how to resolve the country's banking crisis, according to people familiar with the matter.
As chairman of Goldman's Financial Institutions Group, Mr. Wilson has proved to be a big player in capital raisings and reorganizations across the banking sector. In joining Mr. Paulson, a close friend and longtime colleague, Mr. Wilson will try to address issues from a more macro perspective. The Treasury and Federal Reserve are grappling with how to respond to the threat of bank failures, flagging capital levels and crises of confidence in important institutions such as Fannie Mae and Freddie Mac.
While a number of details still must be worked out, Mr. Wilson, 61 years old, is expected to serve without pay, in a period through January, the people familiar with the matter said. President George W. Bush made a personal call to Mr. Wilson in recent days, asking him to assist Mr. Paulson.
Mr. Wilson's appointment is the latest in the ranks of Goldman employees who have moved into public service. And it reflects the seriousness of the issues before the Treasury, which is trying to instill public confidence in the financial system without pushing the federal government into a posture of expensive public bailouts.